Prime rents in key cities were up by 2.3 per cent in the first half of 2012, according to Knight Frank. This amount was considered modest compared to the kinds of increases that were the norm before the goal financial crisis of 2008.
Economists at the company note that these numbers are linked to several elements, including business confidence, employment figures, and other marks used to measure economic performance. In the future, the focus for measuring gains in the marketplace will likely be on emerging markets.
The report mentions that rents in cities like Hong Kong, Singapore, and Manhattan have increased. It also mentions that projected GDP gains in other locations like Israel and Kenya are likely to be even bigger.
The London market is currently going through a weak patch due to affordability constraints, according to Knight Frank. The city’s weak economy is “limiting the scope for rental growth” as well.
Leasing volumes were strong in the second quarter of 2012, and the Olympic Games did encourage some corporate tenants to arrive early to secure the best properties. There was a strong demand for space from US and French tenants at the time.
Rents in prime areas of Manhattan are at the highest level since the recession, which is good news for commercial property investors. Rising employment numbers, an improving economy, and strict banking rules have combined to drive rents up as potential buyers have opted to sit tight until banks relax their policies on lending money.
In Singapore and Hong Kong, the market has seen prices rise by 31.2 per cent and 76.5 per cent, respectively from their recession levels. Demand from foreign tenants has served to put upward pressure on prime rents and caused the price to increase.
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